Bonds are debt securities where investors lend money to governments, municipalities, or corporations in exchange for periodic interest payments and the return of the principal amount at maturity.
Functioning as loans, bonds serve as a way for entities to raise capital for various projects. The interest rate, or yield, is determined by factors like creditworthiness and market conditions.
Investors value bonds for their income stream and relative safety compared to stocks. Bond prices fluctuate based on interest rates and market demand.
